The Hong Kong government incentivises employers to contribute to Hong Kong-based ORSO schemes. Contributions into pension schemes on behalf of a company’s staff members get full tax relief against corporate profits tax, subject to a maximum of 15% of each of those individuals total annual remuneration.
ORSO schemes may also offer particular tax advantages to expatriate staff who intend to return to a country that has a double tax treaty with Hong Kong. A number of countries have entered into treaties with Hong Kong that specify that pension distributions from Hong Kong corporate retirement plans “in consideration of past employment” are only taxable in Hong Kong. These treaty partners include Belgium, Canada, the Czech Republic, France, Hungary, Indonesia, Ireland, South Korea, the Netherlands, Romania, Russia, Switzerland and the UK.